Stocks end full week in the green

MANILA, Philippines — A looming change in leadership in the US and prospects of an economic rebound in the third quarter pushed local stocks to a fresh eight-month high yesterday, traders said.

Closing the week entirely in the green, the benchmark Philippine Stock Exchange index (PSEi) finished at 6,685.69, up 40.92 points or 0.61 percent.

The broader All Shares index followed suit as it rose 25.41 points or 0.64 percent to end at 3,944.72.

The total value of shares that  were traded was a robust P10.078 billion, with advancing stocks trumping decliners, 109 to 92, while 57 issues were unchanged.

Michael Ricafort of Rizal Commercial Banking Corp. cited positive external factors such as the continued hefty gains in the US stock markets to near record highs with the apparent victory of Joe Biden as the next US president.

Markets are also betting on control of the US Congress being split between Republicans and Democrats, which could mean low taxes and light regulation that investors like to stay in place.

“Markets are still betting on a clear election outcome (presumably Biden),” said Mizuho Bank in a report.

Analysts warn that an extended court battle with no clear winner could increase uncertainty, which markets dislike, and drag down stocks.

Also, the US Federal Reserve said its key interest rate would be left at a record low near zero, reaffirming its readiness to do more to support the economy under threat from a worsening coronavirus pandemic.

These factors, Ricafort said, have resulted in improved global market risk appetite especially in emerging markets such as the Philippines.